Markets
The 10-year Treasury yield crossed 3.5% on Monday for the first time since 2011, while the rate on the 2-year Treasury rose overnight to a 15-year high of 3.97%. The deep inversion and bearish run in the bond market is spooking investors ahead of another monster rate hike by the Fed, which meets today for its September meeting. As long as inflation continues to surprise to the upside, the volatility will likely remain, with the central bank now clearly willing to bring down the price pressures at all costs.
Source: SeekingAlpha.com
Economic Calendar
FOMC meeting begins
8:30 Housing Starts and Permits
1:00 PM Results of $12B, 20-Year Bond Auction
https://www.investing.com/economic-calendar/
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S&P 500
Prior Session was Cycle Day 3 (CD3): Gap lower found support at the critical 3850 level, at which time price reversed and proceeded to rally throughout the session, recovering the CD1 Low for a Positive 3 Day Cycle. Prior range was 81 handles on 2.046M contracts exchanged.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1 (CD1): Average Decline for CD1 measures 3855, which continues to be critical support. Key event is FED Day tomorrow, so as such traders will be positioning for continued volatility. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 3905, initially targets 3925 – 3930 zone.
Bear Scenario: Price sustains an offer below 3905, initially targets 3885 – 3880 zone.
PVA High Edge = 3902 PVA Low Edge = 3873 Prior POC = 3887
Range Projections and Key Levels (ES) December 2022 (Z) Contract
HOD ATR Range Projection: 3982; LOD ATR Range Projection: 3848; 3 Day Central Pivot: 3905; 3 Day Cycle Target: 3983; 10 Day Average True Range 87; VIX: 26
Nasdaq 100 (NQ)
Today is Cycle Day 1 (CD1)…Average Decline for CD1 measures 11768. Prior range was 274 handles on 740k contracts ts exchanged. As such, there are two estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustains bid above 11970, THEN initial upside estimate targets 12025– 12050 zone.
Bear Scenario: IF Bears sustains offer below 11970, THEN initial downside estimate targets 11950 – 11920 zone.
PVA High Edge = 11966 PVA Low Edge = 11858 Prior POC = 11916
Range Projections and Key Levels (NQ) December 2022 (Z) Contract
HOD ATR Range Projection: 12280; LOD ATR Range Projection: 11755; 3 Day Central Pivot: 11976; 3 Day Cycle Target: 12480; 10 Day Average True Range: 336; VIX: 26
Trade Strategy: Our tactical trade strategy will simply remain unaltered…We’ll be flexible to trade both long and short side from Decision Pivot Levels. Continue to focus on Bull/Bear Stackers and Premium/Discounts. As always, remaining in alignment with dominant intra-day force increases probabilities of producing winning trades.
Stay Focused…Non-Biased…Disciplined ALWAYS USE STOPS!
Good Trading…David
“Knowing is not enough, We must APPLY. Willing is not enough, We must DO.” –Bruce Lee
*****This trade strategy report is disseminated for “education only” and should not be viewed in any way as a recommendation to buy or sell futures products.”
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